Travelling Expenses

Usually the cost of travelling between home and work are not tax deductable but where an employee had to travel to a temporary work place, the cost can be deductible.

A temporary workplace is one where either:

  • The individual works there for no longer than 24 months, unless this is the period of employment or

  • He spends less than 40% of his working time there.

Case History: Two construction workers Phillips and Macken recently failed to have their travelling expenses allowed.

In Phillips case, he had three separate jobs in the year to 5 April 2001, each with a separate contract and each with different construction companies at three different sites.

Attendance at each site was during a period that coincided with a separate employment and so travelling from home to work in accordance with the rule in 1 above was ordinary commuting.

Macken had a temporary job with a construction company in the year to 5 April 1999 at a site in Bristol but during the course of the year became permanently employed by the company and continued to work at the Bristol site. In total, he worked at the Bristol site between March 1998 and May 2000. Since this was more than 24 months commuting expenses were not deductible under rule 1.

This is an area where some planning may be possible and you should contact us for further information. For example, in the construction industry, it could be helpful to an employee to work for say 18 months at two different sites rather than for three years at one site.